Balancer Grants: Wave 2 Final Report

Results, Learnings and Next Steps

The Balancer Grants DAO program as it is currently running was established in August 2021 after a community discussion, which can be found on Balancer’s governance forum here and the snapshot vote here. The current wave will run until the end of January and the vote for grant wave 2 has given the program 32,500 BAL to be allocated towards grants for this current round.

Since the start, a lot has happened. The Balancer Grants DAO is no longer spearheading the Balancer DAO experiment. SubDAOs are forming! Grants will be one among many, and happily so. How has the GrantsDAO been doing the last months, and where do we see ourselves go? That’s what will be discussed in this report.

Learnings

As a community-led grants program, we want to be transparent about our learnings. We believe they can bring the community forward and help build out a bigger Balancer ecosystem. The flipside of that is, that the learning section of this report is quite extensive. If you are more interested in the results of this grants round, its grantees and the numbers associated with it, then you can skip towards the Grant Achievements section.

Looking back at Wave 2 and its goals

In the Wave 1 Final Report we identified 5 areas of improvement.

Token swaps — Last wave we identified the need for a more structured approach to DAO2DAO agreements. Our Venture Lead Luuk has created a Deal Flow which has been used for both mStable and PrimeDAO tokenswaps.

LM incentives — Since last wave grantees and the LM committee have been connected and this has been going smoothly.

Venture Committee — The Venture Committee idea as discussed last wave has instead been absorbed by the newly formed Partnership subDAO.

Retainers — Out of all four retainer possibilities (PowerPool, CurveLabs, Thanos and an auditor) only Thanos got one for his ongoing work. During the last wave the two other groups did work with Balancer, but through different agreements. After discussing it a couple of times, the idea of an auditor has turned out too expensive and not urgent enough for the DAO to go after.

RFP-Bounties — Our RFP Lead has reworked the RFP page into a more professional and clear list. This wave we had 2 people reach out for RFP work, which, perhaps is not that bad, considering that it is very difficult to find good devs for these kind of tasks. We are again considering finding a more biz-dev minded DAO member to actively source these kind of grants. For now, due to the low amount of extra work, our RFP Lead has requested to become a regular committee member instead and continue the work that way in the next wave.

Wave 2 Learnings

We have done more follow ups with grantees and got some feedback. One of our grantees suggested open sourcing our process:

The process and protocols need to be documented and open sourced for other DAOs to see and implement. I’ve had some horrific experiences with other DAOs grants teams.

First of all, we are of course happy to hear this! And the idea fits the spirit of the open source DeFi culture. So this is something we will for sure be working on during the next wave.

Another grantee’s suggestion was centered around collaboration:

It may be helpful to be connected with other Balancer Grants recipients that we may be able to partner/integrate with in some way.

With the Partnership subDAO starting to take form, it would be great to create some form of overview for our grantees and partners to have a clear idea of synergies. This also touches upon a different learning this wave. As the protocol fee got turned on, this turned out (badum tss) to create issues with one of our grantees protocol setup. Luckily the communities came together quickly and solved the problem. This highlighted the importance of grantees not only building on top of the Balancer Protocol but also for them to get closer to the Balancer community and partake in debates in order to mitigate these situations. 2021 Balancer created a vibrant and diverse ecosystem, 2022 we should put some focus on getting a vibrant and diverse community.

Grant Wave 2 has gotten less applications and also less got accepted. This could be contributed to a number of reasons:

1. The bull market makes it less necessary for teams to ask for funding and brings out more opportunistic low quality applicants.
2. The teams that wanted to participate have done so by now. Perhaps the projects that were eager to join did during the first wave. The first wave did bring in a lot of protocols after all.
3. It was just that time of the year, holiday season was in full swing and most projects took some time to rest after an explosive year full of activity. Q4 usually is not the quarter to start new projects.
4. Or perhaps our current grant program method is not effective enough? The committee consists of part-timers and works with sourcing applicants passively. Going out and searching for grants could change things, but would mean more intensive work for the committee, in a time where most of the members already have high workloads elsewhere within the (Balancer) community.

Whereas Wave 2 started with ideas of perhaps experimenting with funding subDAOs, by now the reality has already moved way faster and soon the Grants subDAO will be applying for a budget at the Ops subDAO. Wave 2 however has a lot of funding left, and will either keep the budget for the next wave, or return the budget and apply at the Ops subDAO. We will gather the community’s opinion on this matter.

These changes are also reflecting within the composition of the Grants Committee. And 3 out of the 7 members will not be continuing in Wave 3. Our member Nick will leave due to other work in different projects. Venture Lead Luuk will be joining the Balancer Partnership subDAO. And our member Solarcurve will focus on leading the Balancer Ops subDAO. Exciting and promising moves and we thank them for their contributions during the last two waves. The committee will still consist of 2 devs, 1 crypto researcher and a prominent community member, therefore we feel confident that we can continue the grants program. Since, even though it has slowed down, it has not stopped. We still get a lot of applications in, have quite some live grants building and we want to continue giving projects in the space this opportunity!

The 3 month iteration period has again proved its worth, as enough new changes and affirmations have taken place within the last round. After the first wave we made it clear that we were learning as we went and that we wanted Wave 2 to go even smoother. I am confident in saying we managed to do so. Issues of last wave (gas fees, lack of communication, etc.) did not reoccur during this round. The structures in place are working as intended. Following wave we will look for ways to make this more publicly available for other programs and subDAOs.

Grant Achievements

After receiving 53 applications, 8 projects have been approved for grants for a total of $59,070.

Compared to last wave, the grantees of Wave 2 were more closely related to Balancer itself, compared to protocols building on top of Balancer’s tech stack. Grantees this wave worked on tooling, marketing, community docs, and events for Balancer. We also had grantees working on security compliant tokens and a project integrating Balancer V2’s liquidity and BPTs. Some of our grantees from Wave 1 have also been able to complete their grant.

Grantee Updates

The program is proud to present our grantees and their updates or completed grants, in alphabetic order:

• Armada Research

This Wave 1 grant covers the creation of an optimization algorithm. During Wave 2 they have been updating the code and are now working on order-splitting. An academic paper is in the works!

• Atlantis

In November, Atlantis, a Wave 1 grantee, integrated Balancer into their demo / prototype version with 2k+ active users. Since then, they’ve been full steam ahead building their Alpha version with many upgraded game and social features, that will feature a custom Balancer building complete with NPCs that teach users about Balancer and how to use the app in game. The Atlantis community has grown to a total of 28k+ users across social platforms and is planning to launch the Alpha version after our community NFT sale at the end of January.

• Balpy

Balpy is one of our Wave 2 Balancer tooling grants. The improvement work on balpy is still ongoing. The Python packaging and style has gotten a makeover. Tests for the package are being discussed to make it more robust, and progress is being made on the implementation of the off-chain Balancer pool calculations (one of the main goals of the grant work)

• Crypto Plaza

One of the first events that got sponsored by the BalancerDAO was Crypto Plaza. None other than our own Ballers Andrea and Maria were there to give a talk about Balancer and present our ecosystem to the fullest! Read more about Crypto Plaza here. We expect the Marketing subDAO to take on future events instead.

• DeFi Africa

The goal of collaborating with DeFi Africa is to rapidly spread awareness of DeFi and Balancer across the continent. The first physical event is scheduled this week on the 22nd. This event will focus on Balancer & web3, including a presentation of our own prominent balancer member Maria. Soon after it will be followed by an AMA on the 31st.

• DeFi Basket

DeFi Basket is one of the latest additions to the grant program. With this grant they will make it possible for new DeFi users to create portfolios in 1 transaction, leveraging Balancer V2 liquidity and having the possibility to include BPTs.

• HaloDAO

Has been given an initial grant to develop a stable pool and onboard a variety of non-USD pegged stablecoins into Balancer’s ecosystem. During Wave 2 they were working on implementing their custom add liquidity logic on top of their balancer FX pool. This ran into technical challenges especially with the math and data structure differences which are being discussed with BLabs. HaloDAO will eventually launch a new pool type optimized for FX style stablecoin trading.

• Indexed Finance

This Wave 1 grantee had a rough patch last year and has been focused on cleaning up. Besides these trials and tribulations, Indexed Finance has been building further features on the Polygon deployment.

• RealEstate.Exchange

As one of the Wave 1 grantees, RealEstate.Exchange has been able to complete their grant early this year! Their ERC-1400 tokens and their BRICK ERC-20 token have been launched on testnet and are compatible with Balancer V2. During 2022 we expect a second grant which will focus on building towards their mainnet launch. There it will allow investors to borrow, buy and sell real estate through tokens in a compliant manner through Balancer V2.

• Tempus

Another Wave 1 grantee that has completed its grant is Tempus, where you will now be able to receive a fixed-rate yield on any yield-bearing token (LP tokens, stETH, cTokens) for a fixed period of time. Tempus used an LBP fair launch for their TEMP token, which is now trading on Balancer. Their mainnet has gone live on the 15th of December and Tempus and Balancer are now working on longer term synergies.

• Verified Network

Is expecting to complete testing of their new Balancer pool for issuing regulation compliant security tokens by the 25th of January. On the business side, Verified Network is ready with an issue of tokenized notes from an investment firm in Luxembourg, which in part will be using the Balancer pool.

• Wes Floyd

This new grantee spent the past 15 years working in enterprise technology around cloud technology, decentralized databases and application development. His grant will focus on research on how to further decentralize the Balancer DAO by inventorying what our DAO uses to function.

• Whiteboard Crypto

This popular Youtube channel will, as part of its grant, publish three Balancer exclusive tutorials. The first of the three has been published and can be viewed here.

• Zen Dragon

On of our very own Balancer community members has been busy lately! Zen Dragon has been working on balancer.tools for the IL and price impact tools. And is now planning on publishing more papers and set up a gitbook for the community. To support this outstanding work, Balancer Grants is happy to support him moving forward.

Grants Program Expenses

The grants committee had been given 51,000 BAL in total from the Balancer Treasury for Wave 2. Most of this was allocated towards grants, the rest was allocated towards the committee and support. Support became a larger amount this wave due to expansion of the committee with 2 new members. Since 3 members leave coming wave, these expenses will go down again.

Wave two runs until the end of January, and we still have some contribution payments to go, but as one of the learnings of last Wave, we strive towards giving insight into our program ahead of the next wave.

During the last three months grant payments towards Wave 1 & 2 grantees accounted for 6017.28864 BAL. Around ~$90,000 is left to be paid out after meeting milestones. Both Wave 2 and 1 expenses will be shown below.

Wave 2 and its expenses follow a similar pattern as Wave 1, with some grants valued in BAL and most in USDC terms. Instead of reimbursing at the end, the committee budgeted gas fees. Of the 1 ETH we bought for this, 0.7818 ETH is still left over, meaning we overestimated or were too worried about Ethereum’s gas prices the last quarter.

As a quick recap, Wave 2 budgeted 7500 BAL for the committee after a community push to extend the team. A budget for a Marketing/Bizdev member and an ad hoc budget were included plus a 1000 BAL budget for external expenses.

Finding a Marketing member took more time then expected and therefore the Marketing position hasn’t been filled yet, neither have we spent much of the budget for other expenses. By chance we have had a conversation with a marketing potential today! So we hope to be able to act upon this side of the grants real soon.

As can be seen above, the amount of grantees was quite similar to Wave 1 (11 grantees), however the total amount allocated went down drastically compared to Wave 1 (total of $463,500).

Besides the grantee allocations for new grantees, the committee has also kept track of Wave 1 grantee milestones and payments. The Wave 1 treasury that had been unspent (9587.4362 BAL) has been used for this purpose.

As can be seen, most of the grant payments during this Wave were towards Wave 1 grantees finalizing their grant.

Next Steps

As illustrated earlier, there are plenty of Wave 2 grants still live and in need of payment on completion. What is also clear, is that the budget of Wave 2 can easily compensate for a Wave 3. Now that the Ops subDAO is being formed and the new subDAOs will apply for a budget through this new structure, the question arises. What shall we do moving forward?

1. The grants committee does not apply for new funding for Wave 3 and continues with the current Grants Treasury.
2. The grants committee returns funds of Wave 1 & 2 to the DAO Treasury and applies for a new budget (for old and new grantees) at the Ops subDAO.

We will poll the community on which option has the preference.

Round Up Event

January 27th at 14:00 CET we will host a Round Up on Discord where our grantees can give a short update and we will end with a Q&A. You are all welcome to join us!

Wave 2 is ending, but grants will continue. Apply now!

If you are interested in supporting the development of the Balancer Ecosystem or want to build on top of the Balancer Protocol, this is your chance! Get started by filling in the Grants Application form. You can also check out our RFP page for inspiration!

For further questions about how the Grants DAO works, check out the grants page, follow us on Twitter, or send an email to grants@balancer.community.